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I Wish That I Knew What I Know Now, When I was Younger

I loved this question from the most recent Q&A:

“What do you wish you knew, that you know now, when you were first starting out after college?”

I am hardly qualified to answer this, but I do have some thoughts.

First, where do I begin?  My whole life has been one big evolving learning experience.  There is so much I wish I’d known when I was graduating college.  But mistakes are part of the experience.  That’s how people grow.  Regulars know that I totally embrace being wrong.  I think it’s such an important part of life and learning to grow as a person.  We’re all flawed, irrational at times and learning as we go.  That’s part of what makes it all worth doing.

Anyhow, here are three of the more important lessons I’ve learned:

1)  Know the difference between money and wealth.  When you’re young you’ll be inclined to pursue a career simply because you think there are great financial gains to be made.  In essence, you’re thinking that money will solve all your problems.  But this mentality can lead to all sorts of other problems because the pursuit of money could lead to an imbalance in your pursuit of other things that matter in life.  The pursuit of wealth can consume people to the point where they lose sight of other things that matter.  Of course, this also doesn’t mean you should follow the generic “do what you love” advice.  Doing what you love is often the extreme opposite view which could lead you down a path where you end up generating a sub-par income which creates its own obvious problems.  The key, in my opinion, is finding some balance.  You don’t need to be totally in love with what you do for a living.  But it has to interest you enough that you’re totally engaged in doing it well.  Additionally, you can never lose sight of the necessity for balance here.  Balance is the holy grail of wealth.  When you can find a decent income doing something your’re totally engaged in while also being able to embrace the things in life that really matter, you’ve achieved a very special thing.  And a big part of that has to do with understanding that money isn’t the path to true wealth.

2)  Know what it means to invest in your future production.   Generating an income doesn’t mean punching a ticket that anyone else can punch.  If you want to generate an income you should prove to other people that you have a unique and irreplaceable talent.  Investing in yourself is the pursuit of developing a differentiating skill set.  When you have a unique skill that other people see the value in then it doesn’t matter if you’re self employed or you work at the biggest company in the world.  Your customers and your co-workers will see the value in your abilities and you will be irreplaceable.  The only way to achieve this is to develop that skill set by knowing the importance of investing in yourself.  We too often think that “investing” is something that’s done in other people, but it’s primarily something we do in ourselves in the pursuit of proving to others that we have something valuable to contribute to their well-being.

3)  Be a measured optimist.   I got into finance obsessed with “risk management”.  That is, I was obsessed with finding the bad in the good.  This is a valuable tool to develop in all facets of your life, but it can also be a dangerous one if you let it consume you.  It can turn you into an irrational pessimist.  We see this all too often following the financial crisis.  I think it’s so important to approach the world in an optimistic manner.  This doesn’t mean you allow yourself to turn into the irrational optimist, but you again have to find the right balance here.  You can be an optimist, but also a risk manager.  It is valuable to find the bad in the good, but you also have to be able to find the good in the bad.  Being a measured optimist gives you the ability to know when to take risks, but not become consumed by the fear of not taking risks.  Ironically, a good risk manager knows when to take risks.  Not just when to avoid them.  This is what being a measured optimist is all about.